Inheritance Tax - Numbers To Double
26 November 2013
The number of families liable to inheritance tax (IHT) is likely to double by 2016/17, experts have warned, fuelling calls for the Chancellor to review the controversial tax.
According to some analysts, the number of estates caught by IHT is expected to rise from 21,000 last year to 42,000 in 2016/17.
The IHT nil-rate band (or tax-free threshold) has been frozen at £325,000 since 2009, and the Government has announced that it will remain at this level until at least April 2018.
However, house prices are climbing faster than previously anticipated, with recent statistics suggesting that prices could rise by 25.2% by the end of 2018. This is likely to lead to a sharp increase in the volume of estates being dragged into the IHT net.
‘Inheritance is a deeply unfair double tax that punishes families simply for having the misfortune of losing a loved one,’ commented Matthew Sinclair, chief executive of the TaxPayers’Alliance.
A Treasury spokesperson said: ‘Over 96% of all estates do not have to pay inheritance tax. Since 2009, the value of core estate assets such as domestic property has fluctuated significantly. Despite this, the number of estates paying tax has remained at less than 4% for over four years’.
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